T1 2012 Faits saillants (en anglais)
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Transcript of T1 2012 Faits saillants (en anglais)
Q1 2012 FINANCIAL HIGHLIGHTS
May 3, 2012
2
Forward-looking statements are included in the following presentations. These forward-looking statements are identified by the use of terms and phrases such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “project”, “will”, “would”, and similar terms and phrases, including references to assumptions. Such statements may involve but are not limited to comments with respect to strategies, expectations, objectives, goals, aspirations, intentions, planned operations or future actions.
Forward-looking statements, by their nature, are based on assumptions and are subject to important risks and uncertainties. Any forecasts,
predictions or forward-looking statements cannot be relied upon due to, among other things, changing external events and general uncertainties of the business and its corporate structure. Results indicated in forward-looking statements may differ materially from actual results for
a number of reasons, including without limitation, dependency on top Accumulation Partners and clients, conflicts of interest, greater than expected redemptions for rewards, regulatory matters, retail market/economic conditions, industry competition, Air Canada liquidity issues, Air Canada or
travel industry disruptions, airline industry changes and increased airline costs, supply and capacity costs, unfunded future redemption costs, failure to safeguard databases and consumer privacy, changes to coalition loyalty programs, seasonal nature of the business, other factors and prior performance, foreign operations, legal proceedings, reliance on key personnel, labour
relations, pension liability, technological disruptions and inability to use third party software, failure to protect intellectual property rights, interest rate and currency fluctuations, leverage and restrictive covenants in current and future indebtedness, uncertainty of dividend payments, managing growth,
credit ratings, as well as the other factors identified throughout this presentation and throughout our public disclosure record on file with the Canadian securities regulatory authorities.
The forward-looking statements contained herein represent the expectations of Groupe
Aeroplan Inc., doing business as Aimia
(“Aimia”), as of May 3, 2012 and are subject to change. However, Aimia
disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as
required under applicable securities regulations.
For further information, please contact Investor Relations at 416 352 3728 or [email protected].
FORWARD-LOOKING STATEMENTS
Q1 2012 Financial Highlights
DAVID ADAMS EXECUTIVE
VICE-PRESIDENT & CFO
4
(1)
Variance in Gross Billings from the prior year includes the impact related to the loss of the Qantas business and the remaining phasing-out of the Visa business of $4.7 million and $3.3 million, respectively.
(2)
Before depreciation and amortization. (3)
Applying the current Breakages estimates, Adjusted EBITDA for the three months ended March 31, 2011 would have been $69.2 million. Adjusted EBITDA for the three months ended March 31, 2011 includes $1.4 million of restructuring expenses and $1.9 million
of exit costs associated with the phasing out of a portion of the Visa Business.(4)
Calculated as: (Free Cash Flow before common and preferred dividends paid, less preferred dividends)/ weighted average common shares outstanding.(5)
Discrepancies in variances may arise due to rounding.(6)
Constant Currency excludes the translation effect of foreign operations on the consolidated results. For more information on Constant Currency, please refer to Aimia’s
May 3, 2012 earnings press release.
** information not meaningful
Q1 2012 CONSOLIDATED FINANCIAL HIGHLIGHTS
Q1 2012 Financial Highlights
($ millions except per share amounts) 2012 2011Year
Over YearConstant
Currency (6)
Gross Billings(1) 536.6 527.9 1.7% 1.2%Gross Billings from sale of Loyalty Units 386.0 362.7 6.4% 6.6%Total Revenue 567.7 546.2 3.9% 3.5%Cost of rewards and direct costs 322.4 327.6 (1.6%) (2.1%)Gross margin (2) 245.3 218.6 12.2% 12.0% Gross margin (%) 43.2% 40.0% 319 bps 327 bpsDepreciation and amortization 29.3 31.1 (6.1%) (6.2%)Operating expenses 140.9 138.0 2.1% 1.6%Operating income 75.1 49.5 51.9% 52.5%Share of net earnings of PLM 1.2 6.1 na naNet earnings 44.6 25.3 76.7% na
Non-GAAPAdjusted EBITDA(3) 88.9 72.6 22.5% 22.5% Adjusted EBITDA margin (as a % of Gross Billings) 16.6% 13.7% 281 bps naFree Cash Flow before dividends paid 18.3 (21.2) 186.6% **Free Cash Flow before dividends paid per common share(4) 0.09 (0.13) ** **
Three Months Ended March 31, % Change (5)
5
CONSOLIDATED GROSS BILLINGS
(1)
Constant Currency excludes the translation effect of foreign operations on the consolidated results. For more information on Constant Currency, please refer to Aimia’s
May 3, 2012 earnings press release.
Q1 2011($ millions)
Q1 2012($ millions)
Q1 2012 Financial Highlights
2011 Reported Loss of Qantas Business Excluding Noted Items 2012 Reported
$527.9 $523.2$536.6
($4.7)
+2.6%growth; +2.1% in c.c.(1)
+1.7%growth; +1.2% in c.c.(1)
6
CONSOLIDATED ADJUSTED EBITDA
(1)
Constant Currency excludes the translation effect of foreign operations on the consolidated results. For more information on Constant Currency, please refer to Aimia’s
May 3, 2012 earnings press release.(2)
Adjusted EBITDA excluding noted items divided by Gross Billings excluding noted items.
Q1 2011($ millions)
Q1 2012($ millions)
Q1’11 margin(2) = 13.9% Q1’12 margin = 16.6%
Q1 2012 Financial Highlights
2011 R epo rted B reakage A djustment Excluding B reakageA djustment
R estructuring andR eo rganizat io n C harges
Excluding N o ted Items 2012 R epo rted
$72.6 ($3.4) $3.3 $72.5
$88.9
$69.2
+28.5%growth; +28.6% in c.c.(1)
+22.5%growth; +22.5% in c.c.(1)
7
FREE CASH FLOW
Free Cash Flow (1)($ millions)
FCF/ Common Share (2)
(1)
Free Cash Flow before common and preferred dividends paid.(2)
Calculated as: (Free Cash Flow before common and preferred dividends paid, less preferred dividends)/ weighted average common shares outstanding.
$197.6
Q1 2012 Financial Highlights
Q1 2012 Q1 2011
$18.3
($21.2)
-$0.13
$0.09
Q1 2012 Q1 2011
$0.09
($0.13)
8
(1)
Before depreciation and amortization.(2)
Intercompany revenue and expenses related to the comparative period have been reclassified to conform with the presentation adopted in the current period.
(3)
Discrepancies in variances may arise due to rounding.
CANADA – Q1 2012 FINANCIAL HIGHLIGHTS
Positive results despite challenging market conditions
($ millions) 2012 2011(2) Year Over YearGross Billings Aeroplan 273.7 275.2 (0.6%) Proprietary Loyalty 58.5 59.0 (0.7%) Intercompany eliminations (19.0) (14.3) na
313.2 319.9 (2.1%)Total revenue Aeroplan 332.4 309.7 7.3% Proprietary Loyalty 59.3 59.2 0.2% Intercompany eliminations (19.0) (14.3) na
372.7 354.6 5.1%Gross margin (1)
Gross margin (%) 47.8% 42.4% 546 bps Aeroplan 154.4 125.1 23.4% Proprietary Loyalty 24.3 25.2 (3.5%) Intercompany eliminations (0.4) - na
178.3 150.3 18.6%Operating income Aeroplan 93.5 64.7 44.5% Proprietary Loyalty 4.3 8.0 (45.9%)
97.8 72.7 34.5%Adjusted EBITDA Adjusted EBITDA margin (as a % of Gross Billings) 31.1% 27.5% 358 bps Aeroplan 90.5 77.2 17.3% Proprietary Loyalty 6.9 10.8 (36.4%)
97.4 88.0 10.7%
Three Months Ended March 31, % Change (3)
Q1 2012 Financial Highlights
9
EMEA – Q1 2012 FINANCIAL HIGHLIGHTS
(1)
Before depreciation and amortization. (2)
Intercompany revenue and expenses related to the comparative period have been reclassified to conform with the presentation adopted in the current period.(3)
Discrepancies in variances may arise due to rounding.(4)
Constant Currency excludes the translation effect of foreign operations on the consolidated results. For more information on Constant Currency, please refer to Aimia’s
May 3, 2012 earnings press release.
** information not meaningful
Wins with existing clients in both Customer Loyalty and
Business Loyalty
Decrease in Gross Billings mostly explained by the
phasing out of a portion of the Visa business in the US
representing $5.8MM
Wins with existing clients in both Customer Loyalty and
Business Loyalty
Decrease in Gross Billings mostly explained by the
phasing out of a portion of the Visa business in the US
representing $5.8MM
Q1 2012 Financial Highlights
($ millions) 2012 2011(2)Year
Over YearConstant
Currency (4)
Gross Billings 143.9 120.9 19.0% 19.7%Total revenue 117.1 104.1 12.5% 13.1%Gross margin (1) 33.0 33.3 (1.0%) 0.3% Gross margin (%) 28.2% 32.0% (385 bps) (365 bps)Operating income (loss) (6.4) (2.4) (170.8%) (159.7%)Adjusted EBITDA 4.0 3.2 25.9% 35.6% Adjusted EBITDA margin (%) 2.8% 2.6% 15 bps 35 bps
Adjusted for Change in Breakage EstimateAdjusted EBITDA - On a consistent breakage rate basis 4.0 (0.2) ** ** Adjusted EBITDA margin (%) 2.8% (0.2%) 296 bps 316 bps
% Change (3)Three Months EndedMarch 31,
10
(1)
Before depreciation and amortization.(2)
Intercompany revenue and expenses related to the comparative period have been reclassified to conform with the presentation adopted in the current period.(3)
Discrepancies in variances may arise due to rounding.(4)
Constant Currency excludes the translation effect of foreign operations on the consolidated results. For more information on Constant Currency, please refer to Aimia’s
May 3, 2012 earnings press release.
** information not meaningful
US & APAC – Q1 2012 FINANCIAL HIGHLIGHTS
Proprietary loyalty services (formerly Carlson Marketing) on track to deliver AEBITDA % margin of between 6% -
8%, excluding restructuring and VISA exit costs.
Q1 2012 Financial Highlights
($ millions) 2012 2011(2)Year Over
YearConstant
Currency (4)
Gross Billings 80.9 88.0 (8.0%) (11.7%)Total revenue 79.3 88.3 (10.2%) (13.6%)Gross margin (1) 35.3 35.7 (1.1%) (3.8%) Gross margin (%) 44.6% 40.5% 411 bps 458 bpsOperating income (loss) (1.9) (9.1) 79.2% 79.7%Adjusted EBITDA 1.8 (6.9) 126.6% 122.7% Adjusted EBITDA margin (%) 2.3% (7.8%) ** **
Excluding One-Time ItemsAdjusted EBITDA - Excluding restructuring and exit costs 1.8 (3.6) ** ** Adjusted EBITDA margin (%) 2.3% (4.1%) 632 bps 608 bps
Three Months EndedMarch 31, % Change (3)
11
CLUB PREMIER (PLM)
Wins with existing clients in both Customer Loyalty and
Business Loyalty
Decrease in Gross Billings mostly explained by the
phasing out of a portion of the Visa business in the US
representing $5.8MM
Wins with existing clients in both Customer Loyalty and
Business Loyalty
Decrease in Gross Billings mostly explained by the
phasing out of a portion of the Visa business in the US
representing $5.8MM
•
Key Q1 2012 metrics include:−
US$32 million in Gross Billings (over 30% growth versus prior year)−
More than 30% Adjusted EBITDA margin
•
Based on performance to date, we anticipate that Club Premier will be in a position to begin paying dividends before the end of 2012 without affecting the program’s ability to execute its expansion and capital investment plans
Q1 2012 Financial Highlights
2010 2011 2012
Quarter ended
Quarter ended
Quarter ended
Total
Sept. 12, 2010
Sept. 13 to Dec.31, 2010
Quarter ended March 31, 2011 June 30, 2011
Sept. 30, 2011
Dec. 31, 2011 2011
Quarter ended
March 31, 2012
Gross Billings
N/A $26.4M USD $24.5M USD $28.8M USD $29.8M USD $31.9M USD $115.0M USD $32.1M USD
Members Enrolled
2,744,334 2,786,621 2,825,044 2,889,784 2,976,999 3,044,099 3,044,099 3,102,383
Partners 57 56 57 59 60 64 64 67
Number of Rewards Issued
N/A 75,618 68,627 72,217 76,912 78,900 296,656 77,045
New Members Enrolled
N/A 42,287 38,423 64,740 87,215 67,100 257,478 58,284
12
LIQUIDITY
Mar 31, 2012 Dec 31, 2011($ millions)
Cash and cash equivalents $179.8 $202.1
Restricted cash $17.4 $15.1
Short-term investments $52.9 $58.4
Long-term investments in bonds $280.7 $279.7
$530.8 $555.3
Current portion of long-term debt $200.0 $200.0
Long-term debt $372.1 $386.7
Total Debt $572.1 $586.7
Q1 2012 Financial Highlights
•
On April 13, 2012, Aimia extended the term of its existing $300 million revolving facility by 2 years to April 23, 2016 and obtained an additional revolving facility in an amount not to exceed $200 million, for any term it may request not extending beyond the new maturity date.
•
On April 23, 2012, Senior Secured Notes Series 1 of $200 million were repaid with funds drawn from the additional revolving facility.
13
COMMON DIVIDENDS
Q1 2012 Financial Highlights
2009 2010 2011 2012
Common Preferred
$108$100
$29
$113
Dividends ($ millions)
AIM Payout RatioDividend policy will continue to be reviewed annually to ensure that growth in the payout ratio is proportionate to Aimia’s
free cash flow generation.
Dividend Yield
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
1/4/
2010
2/4/
2010
3/4/
2010
4/4/
2010
5/4/
2010
6/4/
2010
7/4/
2010
8/4/
2010
9/4/
2010
10/4
/201
0
11/4
/201
0
12/4
/201
0
1/4/
2011
2/4/
2011
3/4/
2011
4/4/
2011
5/4/
2011
6/4/
2011
7/4/
2011
8/4/
2011
9/4/
2011
10/4
/201
1
11/4
/201
1
12/4
/201
1
1/4/
2012
2/4/
2012
3/4/
2012
4/4/
2012 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411
Q112
•
Common Share Dividend
Increase of 6.7% to $0.64 per share per year
Dividend yield to exceed 5% based on May 3, 2012 closing price
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q12010 2010 2010 2010 2011 2011 2011 2011 2012
14
Initial NCIBCommon Shares
Repurchased
Total Consideration
(MM)
Average Price Per Common
Share
Total Shares Repurchased to May 13, 2011 19,983,631 $233.0 $11.66
Renewed NCIBMay 16, 2011 –
December 31, 2011
January 1, 2012 –
March 31, 2012
6,262,800
480,000
$75.8
$5.9
$12.10
$12.30
Initial and Renewed NCIBTotal Shares Repurchased to March 31, 2012 26,726,431 $314.7 $11.77
March 31, 2012 –
May 3, 2012 1,481,900 $18.3 $12.35
Total Shares Repurchased 28,208,331 $333.0 $11.80
Total Common Shares Outstanding as at:March 31, 2012 173.4 million
May 3, 2012 171.9 million
COMMON SHARE REPURCHASE SUMMARY
Q1 2012 Financial Highlights
13.0 13.2
2.0
$12.58$12.34
$10.94
FY 2010 FY 2011 Q1 2012
Common Shares Repurchased (MM)
Average Price per Common Share
1515
2012 OUTLOOK
For the year ending December 31, 2012, Aimia
expects to report the following:
Key Financial Metric Target Range
Consolidated Outlook
Gross Billings Growth
1 Between 3% and 5%
Adjusted EBITDA2 Between $370 and $380 million
Free Cash Flow 2,3 Between $220 million and $240 million
Capital Expenditures To approximate $55 million
Income Taxes Current income tax rate is anticipated to approximate 27% in Canada and 17% in Italy. The Corporation expects no significant cash income taxes will be incurred in the
rest of its foreign operations.
Business Segment Gross Billings Growth Outlook
Canada Between 2% and 4%
EMEA Between 8% and 11%
US & APAC1 Between -2% and 2%
Other
Nectar Italia Greater than €60 million in Gross Billings
1.
The Gross Billings growth guidance excludes the effect of a client loss (Qantas) in APAC at the end of the first quarter of 2012. The target growth ranges are based on 2011 reported Gross Billings, excluding $40 million related to Qantas. The client loss will have a negligible impact on Adjusted EBITDA
2.
The Adjusted EBITDA and Free Cash Flow outlook range includes an
assumption of planned incremental operating expenses in business development activities, principally in the U.S., India and Brazil, technology platform related expenditures that are operating in nature and additional brand related expenses associated with our new branding, which in total
will approximate $20 million in 2012.3.
Free Cash Flow before Dividends
The above guidance excludes the effects of fluctuations in currency exchange rates. In addition, Aimia
made a number of economic and market assumptions in preparing its 2012 forecasts, including assumptions regarding the performance of the economies in which the Corporation operates and market competition and tax laws applicable to the Corporation's operations.
Q1 2012 Financial Highlights
APPENDIX
17
Three Months Ended March 31, 2012
GROSS BILLINGS
Q1 2012 Financial Highlights
(1)
Includes Nectar Italia Gross Billings of €14.5 million for the three month period ended March 31, 2012. (2)
Intercompany revenue and expenses related to the comparative period have been reclassified to conform with the presentation adopted in the current period.
(3)
Discrepancies in variances may arise due to rounding.(4)
Constant Currency excludes the translation effect of foreign operations on the consolidated results. For more information on Constant Currency, please refer to Aimia’s
May 3, 2012 earnings press release.
US & APAC15%
EMEA27%Canada
58%
($ millions) 2012 2011(2)Year Over
YearConstant
Currency (4)
Canada Aeroplan 273.7 275.2 (0.6%) (0.6%) Proprietary Loyalty 58.5 59.0 (0.7%) (0.7%) Intracompany eliminations (19.0) (14.3) na na
313.2 319.9 (2.1%) (2.1%)
EMEA (1) 143.9 120.9 19.0% 19.7%
US & APAC 80.9 88.0 (8.0%) (11.7%)
Intercompany eliminations (1.4) (0.9) na na
Consolidated 536.6 527.9 1.7% 1.2%
Excluding One-Time ItemsExcluding Quantas Business 536.6 523.2 2.6% 2.1%
Three Months Ended March 31, % Change (3)
$536.6MM
18
ADJUSTED EBITDA
(1)
Discrepancies in variances may arise due to rounding.(2)
Constant Currency excludes the translation effect of foreign operations on the consolidated results. For more information on Constant Currency, please refer to Aimia’s
May 3, 2012 earnings press release.
Q1 2012 Financial Highlights
($ millions) 2012 2011Year Over
YearConstant
Currency (2)
Canada Aeroplan Canada 90.5 77.2 17.3% 17.3% Proprietary Loyalty 6.9 10.8 (36.4%) (36.4%)
97.4 88.0 10.7% 10.7%
EMEA 4.0 3.2 25.9% 35.6%
US & APAC 1.8 (6.9) 126.6% 122.7%
Corporate (14.4) (11.8) (22.2%) (22.2%)
Consolidated 88.9 72.6 22.5% 22.5%
Three Months Ended March 31, % Change (1)
19
Three Months Ended March 31,
(in $ millions) 2012 2011 Change % Change
Miles revenue 263.2 243.3 20.0 8.2%
Breakage revenue 57.2 52.9 4.3 8.2%
Other 11.9 13.6 (1.6) (12.0)%
Total Revenue 332.4 309.7 22.7 7.3%
Revenue Breakdown
AEROPLAN – REVENUE AND MILES
Average Selling Price & Cost(cents / mile)
Aeroplan Miles Issued & Redeemed(billions)
Q1 2012 Financial Highlights
19.9
21.020.9
21.4
Q1 2012 Q1 2011Aeroplan Miles Issued Aeroplan Miles Redeemed
1.26 1.25
0.930.83
Q1 2012 Q1 2011Average Selling Price Average Cost/ Aeroplan Mile Redeemed
20
Q1 2012 Gross Billings from sale of Loyalty Units
Q1 2011 Gross Billings from sale of Loyalty Units
GROSS BILLINGS FROM SALE OF LOYALTY UNITS BY MAJOR PARTNER
$362.7M$386.0M
Q1 2012 Financial Highlights
Partner A Partner B Partner C Air Canada Other
22.9%
33.5%
16.2%9.8%
17.6%
20.2%
34.6%
15.3%9.6%
20.3%
21
Period Rates Q1 2012 Q1 2011 Change % Change
Period end rate £ to $ 1.5940 1.5595 0.0345 2.2%Average quarter £ to $ 1.5734 1.5803 (0.0069) (0.4%)Average YTD £ to $ 1.5734 1.5803 (0.0069) (0.4%)Period end rate AED to $ 0.2714 0.2646 0.0068 2.6%Average quarter AED to $ 0.2727 0.2685 0.0042 1.6%Average YTD AED to $ 0.2727 0.2685 0.0042 1.6%Period end rate AED to £ 0.1702 0.1699 0.0003 0.2%Average quarter AED to £ 0.1733 0.1700 0.0033 1.9%Average YTD AED to £ 0.1733 0.1700 0.0033 1.9%Period end rate USD to $ 0.9970 0.9696 0.0274 2.8%Average quarter USD to $ 1.0020 0.9861 0.0159 1.6%Average YTD USD to $ 1.0020 0.9861 0.0159 1.6%Period end rate € to $ 1.3298 1.3782 (0.0484) (3.5%)Average quarter € to $ 1.3130 1.3487 (0.0357) (2.6%)Average YTD € to $ 1.3130 1.3487 (0.0357) (2.6%)
FOREIGN EXCHANGE RATES
Q1 2012 Financial Highlights
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